23/10/15 -- Soycomplex: Beans, meal and oil all closed lower on the day and for the week. Dollar strength was a bearish factor across the grains sector today. Good soybean demand from China at these levels continues however. The USDA announced 208,000 MT of US beans sold to unknown for 2015/16 shipment, and also said that previously reported sales of 236,000 MT of US beans to unknown destinations for 2015/16 shipment had been switched to China. China’s central bank cut interest rates by 0.25%, for the sixth reduction since November in an effort to shore up the economy. Argentina’s September soybean crush was reported at 3.815 MMT, up 500,000 MT from a year previously. The Argentine president elections take place on Sunday. The promised export tax reductions on offer from the opposition in particular could be a "game changer" for Argentine agriculture, says Dr Cordonnier. "It would instantly raise prices for corn and soybeans resulting in higher profit margins and renewed optimism for farmers to increase their production going forward," he adds. Oil World reported that the EU imported 14.17 MMT of soybeans in 2014/15, up 4% versus 13.62 MMT in the previous marketing year. Monday brings the latest weekly export inspections report from the USDA. Inspections last week were a very impressive 2.365 MMT. The USDA will also update us with soybean harvest progress in the US. This was 77% complete a week ago. The market is expecting things to be around 86-90% done as of Sunday night. Nov 15 Soybeans closed at $8.95 1/2, down 3 1/4 cents; Jan 16 Soybeans closed at $8.96, down 5 cents; Dec 15 Soybean Meal closed at $305.10, down $2.70; Dec 15 Soybean Oil closed at 28.57, down 28 points. For the week front month beans were 2 3/4 cents lower, with meal down $6.90 and oil 3 points lower.

Corn: The corn market closed around a cent or so higher, and also with small net gains for the week. The USDA announced 130,000 MT of US corn sold to unknown for 2015/16 shipment. In Monday's weekly US crop progress report the trade is expecting the 2015 US corn harvest to be around 74-77% complete versus 59% done a week ago. Weekly export inspections of 459,812 MT last week were a bit below the expected 500-700,000 MT. That meant that actual inspections had fallen below expectations for three weeks in a row. The trade will be hoping this doesn't happen for a fourth week. Season to date inspections were 24% behind those of a year ago as of last week, as strong competition from South America remains a thorn in the side of US export ambitions. FranceAgriMer reported that the 2015 French corn harvest was 58% complete as of Monday, up from 38% done a week previously and versus 32% this time last year. The Russian Ag Ministry said that their 2015 corn harvest was 67.3% complete for a crop of 9.3 MMT so far versus 8.8 MMT this time a year ago. Ukraine said that their corn harvest was now 66% complete on 2.74 million ha for a crop of 14.13 MMT so far. That implies a final crop of around 21.2 MMT. Yields are averaging 5.15 MT/ha. The USDA currently estimate production at a seemingly too high 25 MMT, using an average yield of 6.25 MT/ha. The EU announced that they'd authorised 328 TMT worth of corn import licences this past week, taking the season to date total to 2.3 MMT, down 8% on this time a year ago. Based on a Reuters survey South Africa’s 2016 corn area is estimated at 2.63 million ha, little changed from the 2015 area of 2.65 million. Dec 15 Corn closed at $3.79 3/4, up 1 1/2 cents; Mar 16 Corn closed at $3.88 3/4, up 3/4 cent. For the week Dec 15 corn was 3 cents higher.

Wheat: The market closed little changed, but a bit lower for the week. Thailand were said to have bought 125,000 MT of US wheat for December shipment. The Philippines bought 60,000 MT of US wheat for Jan-Feb shipment and Malaysia bought 40,000 MT of US wheat for December shipment this week. South Korea's CJ are tendering for 51,100 MT of US wheat for March shipment and also bought 50,000 MT of Australian wheat for May shipment. Russia said that their 2015 grain harvest was 97.4% complete at 104.5 MMT versus 106.2 MMT this time a year ago. The wheat and barley harvests are both said to be 99.5% done. Wheat production so far this year is pegged at 63.7 MMT versus 60.9 MMT this time last year, and barley output is 18.2 MMT versus 20.9 MMT in 2014. All these figures are before cleaning and screening. Concerns about dryness holding up plantings in southern/central Russia and Ukraine remain, although some rains are said to have now reached the area. The Ukraine Ag Ministry said that winter grain plantings had been completed on 5.96 million ha, or 81% of the original target. A year ago that figure was 6.98 million ha. Winter wheat planting is reported at 84% complete on 5.2 million ha, and barley plantings are said to be only 58% done on 611k ha. It's getting very late, and risky, for farmers to plant much more now in the hope that crops will get establish before the harsh Ukraine winter sets in. In Russia meanwhile the Ag Ministry say that winter grain plantings are 90.7% complete on 15.5 million ha versus 16.2 million a year ago at this time. Dec 15 CBOT Wheat closed at $4.90 1/2, down 1/4 cent; Dec 15 KCBT Wheat closed at $4.75 1/2, unchanged; Dec 15 MGEX Wheat closed at $5.08, also unchanged. For the week that puts Chicago wheat 1 3/4 cents lower, with Kansas wheat down 8 cents and Minneapolis 4 1/4 cents lower.

The euro finished the week sharply lower, down 2.2% against the pound at 1.39 and 3% lower versus the dollar at 1.10. The move came following the monthly policy decision at the European Central Bank on Thursday where ECB Predident Draghi indicated that increased QE and a further cut in the deposit rate from the current level of -0.2% was a possibility.

The weaker euro was consistent with many analyst's forecasts calling for sterling to be in the 1.40-147 range by the end of the year, and the EUR/USD rate to fall to 1.03-1.05 before hitting parity in Q1 of 2016.

At the risk of repeating myself, this continues to point to Paris grains out-performing London and Chicago grains in the coming months.

It should also help EU exports, although the news that Brussels issued more barley export licences than they did for soft wheat this past week doesn't read too friendly for wheat just yet - the competition from the Black Sea remains a little too intense for the time being.

Soft wheat export licences this week came in at 278 TMT, down 33% on last week, taking the season to date total to 6.47 MMT. That's 29% below the 9.1 MMT worth of licences that had been issued this time a year ago. For barley however the story reads better. Export licences this week totalled 282 TMT, taking the season so far cumulative total to 4.1 MMT, which is 41% above those of a year ago.

EU corn import licences this week were 328 TMT, making the total for the season to date 2.3 MMT, down only a little on 2.5 MMT a year ago.

If there is some upside for Paris wheat, aided by the weak euro, then it's probably already priced-in, according to Rabobank. In their latest monthly market report and price forecasts they predicted Paris wheat at EUR180/tonne in Q1 of 2016, rising to a peak of EUR185/tonne in Q2 before falling back to end next year at EUR180/tonne. Dec 16 Paris wheat closed at EUR191/tonne tonight.

Concerns about dryness holding up plantings in southern/central Russia and Ukraine remain, although some rains are said to have now reached the area. The Ukraine Ag Ministry said that winter grain plantings had been completed on 5.96 million ha, or 81% of the original target. A year ago that figure was a little over 1 million ha higher.

Winter wheat plantings in Ukraine are said to be 84% complete on 5.2 million ha, and winter barley sowings are only 58% done on 611k ha.

In Russia meanwhile the Ag Ministry say that winter grain plantings are 90.7% complete on 15.5 million ha versus 16.2 million a year ago at this time.

The Russian Ag Ministry went on to say that at 99.5% complete, both the 2015 wheat and barley harvests are just about over. Wheat production in bunker weight is said to be 63.7 MMT versus 60.9 MMT a year ago, barley output is reported at 18.2 MMT versus 20.9 MMT in 2014.

In other news Oil World reported that the EU imported 14.17 MMT of soybeans in 2014/15, up 4% versus 13.62 MMT in the previous marketing year.

FranceAgriMer reported that the 2015 French corn harvest was 58% complete as of Monday, up from 38% done a week previously and versus 32% this time last year. French winter wheat plantings (excluding durum) are 58% done, which is 8 points up on a year ago. Winter barley sowings at 78% complete are 7 points ahead of last year.

22/10/15 -- Soycomplex: Beans closed lower as the market simply currently seems to view being above $9/bu as a selling opportunity. The move came despite strong weekly export sales of over 2 MMT beating trade expectations of 1.2-1.8 MMT. Actual exports of 2.33 MMT were a marketing-year high and were up 49 percent from the previous week. Despite another strong week of sales, current commitments are only 77.4% of what they were a year ago, although accumulated exports are 11% ahead of a year ago. The USDA also announced 463,000 MT of US beans sold to unknown for 2015/16 shipment under the daily reporting system. Dryness concerns remain in northern/central Brazil. "October rainfall typically is 150-200 millimetres, but planting conditions this season have been very dry. Mato Grosso’s Centre West soybean area received only 26% of normal rainfall over the past 30 days. The Centre East was similarly dry," said Martell Crop Projections. This could ultimately threaten yields and support prices in the region, said Rabobank. They are therefore more cautious on production potential this year, currently estimating Brazil's crop at 97 MMT. They forecast prices remaining in the $9.00-9.25/bu region, with meal at $315-325 and oil at 28.0-30.5 across the next 12 months. They forecast US 2015/16 ending stocks below 200m bu. MDA CropCast raised their forecast for the global soybean crop by 0.1 MMT from a week ago to 308.3 MMT, with the US 2015 crop unchanged at 3.863 billion bushels. A Bloomberg survey into trader/analyst sentiment in soybeans found 12 bulls, 8 bears and 6 neutrals. Nov 15 Soybeans closed at $8.98 3/4, down 6 1/2 cents; Jan 16 Soybeans closed at $9.01, down 8 1/2 cents; Dec 15 Soybean Meal closed at $307.80, down $2.70; Dec 15 Soybean Oil closed at 28.85, down 33 points.

Corn: The corn market closed around 2-3 cents lower. Weekly export sales of 248,000 MT for 2015/16 were down 59 percent from the previous week and 57 percent below the prior 4-week average. The market was expecting sales of 450-650,000 MT. Total sales so far are only 65% of what they were a year ago at this time. Exports of 409,800 MT were less than stellar too, being down 33 percent from the previous week and 39 percent below the prior 4-week average. Media reports suggested that China could buy about 50% less corn for state reserves in the 2015/16 season than in 2014/15, as local governments offer subsidies to encourage processors to use more domestic grain. Purchases at this sharply reduced level would still raise Chinese corn stocks to 200.0 MMT, it is said. CNGOIC estimated China’s 2015/16 corn crop at a record 228.0 MMT, up 6% from a year ago. MDA CropCast were unchanged on their 2015/16 world corn production estimate, and likewise on this year's US crop at 13.695 billion bushels. They said that they expect final 2015 US corn yields to be closer to 166 bu/acre than the 168 bu/acre currently being used by the USDA. That would tighten US 2015/16 ending stocks by around 160m bu, taking them almost 20% below last season's carryout, they said. That however assumes that the USDA's export numbers are correct. Rabobank forecast US corn prices at $3.80/bu at the turn of the year, rising modestly to $4.10 and $4.20 in the first two quarters of 2016, before falling back a little to end next year at $3.90/bu. A Bloomberg survey into trader/analyst sentiment in corn found 12 bulls, 5 bears and 9 neutrals. Indonesia’s Ag Min estimated Indonesia’s 2015/16 corn imports at 3.0 MMT, little changed versus 3.1 MMT in 2014/15. Russia's 2015 corn harvest is said to be 67.3% done at 9.3 MMT with average yields of 5.10 MT/ha, up 11.8% on a year ago. Dec 15 Corn closed at $3.78 1/4, down 2 1/2 cents; Mar 16 Corn closed at $3.88, down 2 1/4 cents.

Wheat: The wheat market closed around 4-5 cents lower, in tandem with the other markets. Weekly export sales predictably failed to "pull up any trees" at 357,500 MT for delivery in marketing year 2015/16, being down 22 percent from the previous week. They were however in line with albeit modest trade expectations. Exports of 211,900 MT were rather poor, being down 43 percent from the previous week and 60 percent below the prior 4-week average. Concerns over Russian/Ukraine dryness with regards to winter plantings continue, although better weather is said to be in the forecast. The head of Russia’s Grain Union apparently said that 30% of Russia’s winter grain area is currently at risk due to dry weather. The Russian Ag Ministry said that winter grains have been planted on 15.5 million ha, or 90.7% of their forecast, down from 16.2 million this time a year ago. Rusagrotrans estimated Russia's October grain exports at 3.5 MMT, up a little on 3.42 MMT a year ago. Wheat exports this month will total 2.7 MMT versus 2.46 MMT a year ago, they said. Total Jul/Oct grain exports will be 14.62 MMT versus 14.94 MMT a year ago, with wheat shipments down to 11.51 MMT from 12.31 MMT. Exports of both barley (2.17 MMT versus 1.91 MMT) and corn (845 TMT versus 584 TMT) are seen higher than a year ago during this period. Ethiopia are in the market for 1 MMT of wheat, with Black Sea offers said to be the keenest. Japan bought 134,352 MT of food wheat for Nov-Dec shipment split mostly in favour of US origin. South Korea's CJ are in for 50,000 MT of Australian hard wheat. MDA CropCast were unchanged on their world and US (2.218 billion bu) wheat production estimates. Rabobank estimate US wheat prices around $5.00-5.25/bu through until the end of 2016. In line with other analysts they see Australia's crop at 23-24 MMT versus the USDA's "toppy" 27 MMT estimate. Bloomberg's survey found 8 wheat bulls, 6 bears, and 12 neutrals. Dec 15 CBOT Wheat closed at $4.90 3/4, down 4 cents; Dec 15 KCBT Wheat closed at $4.75 1/2, down 5 cents; Dec 15 MGEX Wheat closed at $5.08, down 3 3/4 cents.

22/10/15 -- EU grains traded mostly higher for a third day in succession, although Paris rapeseed was slightly off last night's 10-week highs for a front month.

At the close, Nov 15 London wheat was up GBP0.55/tonne at GBP114.05/tonne. In Paris, Dec 15 wheat was EUR2.0/tonne higher at EUR177.75/tonne, Nov 15 corn was up EUR0.50/tonne to EUR164.00/tonne and Nov 15 rapeseed was down EUR1.00/tonne to EUR380.75/tonne, although other months ended around EUR2.00/tonne higher.

The pound was up sharply against the euro following the news that September UK retail sales were well ahead of expectations. Month-on-month growth of 1.9% smashed market ideas of an advance of only 0.3%. Annual sales growth is now 6.5% versus market expectations of 4.8%.

With numbers like that traders are wondering how much longer can the Bank of England argue that the UK economy isn't strong enough to handle a modest interest rate rise. One or two are even suggesting that the UK could break ranks and beat the US to it to become the first major central bank to begin raising rates.

The ECB met today, and said that that would re-examine their eurozone QE program in December. Any increase in that would put the euro back onto the back foot again.

A Reuters survey estimated the GBP/EUR exchange rate at 1.40 by the end of the year, Lloyds predict 1.47 and Barclays at 1.43 are somewhere in the middle. Again, all of this points towards Paris grains out-performing London wheat in the months ahead.

Malaysian palm oil futures closed higher overnight, and are now around 23% up on their late August lows on the back of El Nino-related production worries.

Oil World said that oil palms in many parts of Malaysia and Indonesia have been further stressed by the ongoing very dry conditions that they've experienced in the first 20 days of October.

This is one of the factors supporting rapeseed prices at the moment. Another is the fact that Ukraine's 2015 rapeseed production was low, and that is expected to fall significantly further in 2016 as dryness there means that only around 75% of the intended area got sown this autumn.

The FAO forecast that Algeria will import 7.2 MMT of wheat in 2015/16 versus their previous 5-year average of 6.0 MMT. Chief supplier is usually France, although they regularly also buy wheat from Canada, Spain, the US, Germany and Mexico.

Bangladesh are reported to have rejected a 20,000 MT cargo of French wheat for failing to match the tender specifications. This is not the first time that this has happened in recent months.

Ethiopia are said to be in the market for 1 MMT of wheat, with the results expected tomorrow. Black Sea origin material is rumoured to be the cheapest offer.

Rusagrotrans estimated Russia's October grain exports at 3.5 MMT versus 3.42 MMT a year ago. Wheat will account for around 77% (2.7 MMT) of that total, they predict.

Russia's Jul/Oct grain exports are called at 14.62 MMT, down 2% on a year ago. That includes wheat shipments of 11.51 MMT (down 6.5%), barley exports of 2.17 MMT (up 13.6%) and those of corn of 845 TMT being up nearly 45%.

Kazakhstan said it's 2015 grain harvest was just about finished at 19.83 MMT, some 4 MMT more than was produced a year ago.

21/10/15 -- Soycomplex: Beans closed with decent gains, building on yesterday's advances, and managing a close above $9/bu on front month Nov 15 too. Demand seems pretty solid. The USDA announced 20,000 MT of US soybean oil sold to China, along with a similar quantity to "unknown" under the daily reporting system today, both for 2015/16 shipment. China customs data pegs the country's September imports at 7.26 MMT, up 44.27% from a year ago. Of that total 5.13 MMT came from Brazil and 1.62 MMT from Argentina. The US traditionally wouldn't be a big supplier to China in September as it falls just right at the start of the new US harvest. China's Jan/Sep soybean imports are 59.65 MMT, up 13.09% from a year ago. That includes 33.04 MMT from Brazil, 6.92 MMT from Argentina and 17.00 MMT from the US. AgroConsult estimated Brazil’s 2015/16 soybean crop at a record high of 100.6 MMT, up 4.6% on last year's 96.2 MMT in it's first estimate for the new season. They see Brazil’s planted area at 33.1 million hectares, up 3.3% from a year ago and have the country's exports at 54.0 MMT. They said that they expect the average price of soybeans in 2015/16 to be around $9.00/bu. Plantings were 14% complete as of October 15th compared to 11% done a year earlier, they said. Deral said Parana’s soybean crop is 51% planted versus 36% a week ago the 5-year average of 49%. Trade estimates for tomorrow's weekly export sales report for beans are 1.2-1.8 MMT and 150-300,000 MT for meal. EU rapeseed futures finished at a 10-week high tonight. Nov 15 Soybeans closed at $9.05 1/4, up 9 1/4 cents; Jan 16 Soybeans closed at $9.09 1/2, up 8 1/2 cents; Dec 15 Soybean Meal closed at $310.50, up $1.00; Dec 15 Soybean Oil closed at 29.18, up 52 points.

Corn: The corn market closed higher for a second day, helped by gains in beans and wheat. The US Energy Dept put weekly US ethanol production at 951,000 barrels/day last week, up a modest 2,000 bpd from the previous week. Ethanol stocks tightened by 100,000 barrels to 18.9 million barrels. Unlike the soy complex though, there's been a dearth of daily announcements from the USDA of impressive corn sales under the daily reporting system. Tomorrow's weekly export sales report will therefore be of interest, with trade forecasts for that a relatively modest 450-650,000 MT. AgroConsult estimated Brazil’s total corn area at 16.7 million ha, up 5.1% from a year ago. They see 2015/16 production at 88.5 MMT, up 3.5% from a year ago. Exports are estimated at 32-34 MMT. They said that Brazilian growers have sold 30-40% of their 2015/16 winter corn crop. Corn loadings at the southern Brazilian port of Paranagua were said to have been suspended again today due to rains. Port operations have now been halted for 11 days in October due to rain. They were also called off for 15 days in September. Talk of buyers looking at switching purchases to other origins remains. Deral said Parana’s first corn crop is 82% planted versus 76% a week ago. Russia said that their corn harvest is 66.3% complete on 1.8 million ha for a crop of 9.2 MMT so far. Yields are said to be averaging 5.09 MT/ha versus 4.56 MT/ha a year ago and the USDA's prediction of 5.0 MT/ha. Chinese customs data has them importing only 170,000 MT of corn in September. Calendar year to date imports are 4.53 MMT, up 180% compared to Jan/Sep 2014. Their September DDGs imports were 934,000 MT, up 73% on a year ago. Dec 15 Corn closed at $3.80 3/4, up 4 cents; Mar 16 Corn closed at $3.90 1/4, up 3 cents.

Wheat: The wheat market finished the day around 3-4 cents higher. Russian material was said to be the cheapest offer in Iraq's recent hard wheat tender, although US wheat wasn't completely blown out of the water, especially when considering the much more expensive freight costs. Still, as with corn, there's been a distinct lack of action with regards to US wheat sales of late. Marketing year sales to date are down 18% from the previous year’s pace. Cumulative sales thus far are just 51% of USDA’s target for the year versus 62% this time last season. Note too that this season's target is the lowest total of the past 44 years. Trade expectations for tomorrow's weekly export sales report for wheat are around 300-500,000 MT. Concerns about dryness in the Black Sea and Australia remain. Chinese customs data has them importing 207,000 MT of wheat in September, with Jan/Sep imports of 2.25 MMT down 20.9% on a year previously. Barley imports last month were 1.3 MMT and 2015 calendar year imports are 8.72 MMT, up 104% year-on-year. Customs data shows Japan imported 1.93 MMT of grain in September, down 9% from a year ago. Tunisia bought 167,000 MT of optional origin durum wheat for Dec-April shipment in a tender. The FAO estimated Algeria’s 2015/16 wheat imports at 7.2 MMT versus the five year average of 6.0 MMT. Russia said that it's 2015 wheat harvest was now 99.5% compete at 63.7 MMT, with yields at 2.51 MT/ha versus 2.63 MT/ha a year ago. The 2015 Russian barley harvest stands at 18.2 MMT off a similar percentage area. Winter grains have now been planted on 15.5 million ha, say the Russian Ag Ministry. That's now over 90% of their forecast, but still 700,000 ha less than this time last year. Dec 15 CBOT Wheat closed at $4.94 3/4, up 3 1/2 cents; Dec 15 KCBT Wheat closed at $4.80 1/2, up 4 cents; Dec 15 MGEX Wheat closed at $5.11 3/4, up 2 3/4 cents.

21/10/15 -- EU grains finished mostly higher, in a fairly quiet news-light day. Nov 15 Paris rapeseed pressed on to a new highest close for a front month in 10 weeks.

At the close, Nov 15 London wheat was up GBP1.00/tonne at GBP113.50/tonne. In Paris, Dec 15 wheat was EUR0.25/tonne firmer at EUR175.75/tonne, Nov 15 corn was EUR2.25/tonne higher at EUR1630.50/tonne and Nov 15 rapeseed was EUR2.50/tonne steadier at EUR381.75/tonne.

Russian material was said to be the lowest offer in Iraq's recent tender for hard wheat, at a reported $254 C&F.

The 2015 Russian grain harvest is now said to be 97% complete at 104 MMT. Wheat and barley harvesting are both said to be 99.3% complete at 63.7 MMT and 18.2 MMT respectively. The corn harvest is reported at 64.5% done on 1.8 million ha for a crop of 9.0 MMT so far.

Russian winter plantings for the 2016 harvest are said to be approaching 90% done on 15.3 million ha. Weather models are now in fairly close agreement predicting above normal precipitation for most of the Russian winter grain areas across the next 15 days. Normal to warmer than normal temperatures are also now forecast in the region from Friday onwards.

The first rains in a month have finally appeared on the main Ukraine plains, after a lengthy period of a water shortage, said Agritel. Low intensity rains have now fallen for the last 24 hours. These are gaining in intensity and the depression causing them will migrate eastward and should allow Russian regions to benefit as well, they add.

The minutiae of yesterday's delayed Defra report into UK 2015 yields shows that the top yielding wheat region in England this year was Yorkshire and Humberside with an average 9.5 MT/ha, followed by the North East and East Midlands, both achieving 9.0 MT/ha.

Yorkshire and Humber also easily topped the English winter barley table with a very impressive yield of 9.1 MT/ha, and ditto spring barley with yields of 7.2 MT/ha.

Yorkshire and Humber shared top spot honours with the North East as the top English rapeseed area, with yields in both averaging 4.0 MT/ha.

That's not quite the full story though, a special mention must go to Scotland. They beat Yorkshire and Humber in wheat with an even better yield of 9.7 MT/ha, and on rapeseed (4.2 MT/ha) as well, and were second in the UK winter barley table (8.3 MT/ha) and joint third with regards to spring barley yields (6.2 MT/ha). They were also incidentally the top oat yielding region in the UK with an average of 7.0 MT/ha.

Of course all this success comes at a cost. A Scottish wheat crop in excess of 1 MMT for the first time since 1992 means that the premium being paid for wheat north of the border is one of the lowest since the start of the century, say the HGCA.

So far in 2015/16, average UK ex-farm prices are currently at their lowest levels since 2009/10. The July-October average UK ex-farm feed wheat price this season is down more than GBP8/tonne compared with last season and almost GBP45/tonne lower than in 2013/14, they add.

A Reuters poll forecast the GBP/EUR exchange rate at 1.40 by the end of the year, rising to 1.4365 by the end of Q1 in 2016. These forecasts are consistent with the predictions discussed yesterday made by Bank of America Merrill Lynch and Barclays.

Standard Chartered meanwhile say that the pound and dollar should both outperform their G10 and Asian rivals over coming months, but that the GBP/USD rate will continue to struggle to break through and hold above the 1.55 area.

The general consensus among most of these market analysts is that the Fed may still raise US interest rates around the end of the year, and that the Bank of England will follow suit here fairly early in 2016. If they're right, then we can expect Paris wheat to do better than it's London and Chicago counterparts over the remainder of the season.

20/10/15 -- Soycomplex: Beans closed higher in "Turnaround Tuesday" style. It was only a relatively modest rebound though, and one that came after four consecutive days of losses. The USDA announced 132,000 MT of US beans sold to China for 2015/16 shipment under the daily reporting system. The weather in Brazil remains "a game of two halves" - hot and dry in northern and central areas and wet in the south. "Extreme heat has developed without significant rainfall in Brazil’s tropical soybean states. Conditions have been extremely dry in October. Without evaporative cooling, temperatures have soared. Maximum temperatures yesterday reached 107 F (41.7 C) in Mato Grosso and Goias. Typically, showers are already underway in late October, but this season the monsoon has been delayed. The slow arrival of tropical rainfall may be related to a very strong El Nino, among the most potent on record. The forecast calls for below average rainfall again in the upcoming week in Mato Grosso and the tropics at large. South Brazil would continue wet, as generous rainfall is predicted in Parana, Rio Grande do Sul and southern Mato Grosso do Sul," said Martell Crop Projections. Dr Cordonnier estimated the Brazilian 2015/16 soybean crop at 100.0 MMT, unchanged from his previous estimate. In Argentina he goes for plantings of 20.9 million ha, up 2% from a year ago. He has production there currently at 60 MMT, also unchanged from previously, but is indicating that this may be lowered in future reports. A group pf Chinese industry analysts estimated the country's October soybean imports at 6.0 MMT, rising to 7.0 MMT in November and 7.2 MMT in December. Nov 15 Soybeans closed at $8.96, up 5 cents; Jan 16 Soybeans closed at $9.01, up 5 1/2 cents; Dec 15 Soybean Meal closed at $309.50, down $1.30; Dec 15 Soybean Oil closed at 28.66, up 52 points.

Corn: The corn market closed around 3 cents higher, more or less reversing yesterday's losses. Safras e Mercado said that Brazil’s first corn crop is 53.8% planted versus 41.9% a year ago, helped by abundant rains in the south of the country. This wet weather in the south continues to disrupt corn exports out of the Brazilian port of Paranagua. This may lead to some Asian buyers switching purchases to other suppliers it is being mooted. Dr Cordonnier estimated the Brazilian 2015/16 total corn crop at 81.2 MMT, unchanged from his previous estimate. He said that there's a lot of uncertainty surrounding Argentine farmers' corn planting intentions, and that the final area sown this year could be down anywhere from 15% to 40% compared to 2014. Japan's use of corn in animal feed in August was 45.7% versus 45.0% a year ago. Russia said that their 2015 corn harvest was 62% complete on 1.7 million ha for a crop of 8.6 MMT to date. Yields are said to be averaging 5.1 MT/ha versus 4.54 MT/ha a year ago. That leaves them on target for a record crop this year. Not so in Ukraine, where production is seen almost 20% lower at 22.9 MMT by the Ag Ministry, and some estimates are now lower than that. Good weather is forecast in US Midwest in the week ahead, which should accelerate this year's corn harvest from the 59% done estimated by the USDA last night. The US Energy Dept are due out with their usual weekly ethanol production and stocks data tomorrow. Production was 949,000 barrels/day last week. The market will be hoping for an increase, especially with US corn exports remaining at a sluggish pace. It's the Argentine presidential elections on Sunday. The polls indicate that it will be a close contest. Both leading candidates are promising export tax cuts on grains for farmers. "If the opposition win, and they carry through on their promise of eliminating the export taxes and to stop interfering in the export market, it could be a 'game changer' for Argentine agriculture," said Dr Cordonnier. Dec 15 Corn closed at $3.76 3/4, up 3 3/4 cents; Mar 16 Corn closed at $3.87 1/4, up 3 1/2 cents.

Wheat: The market closed around 4-5 cents higher, correcting some (but not all) of yesterday's losses. Russia said that their 2015 grain harvest was 96.8% complete at 103.6 MMT versus 105.7 MMT this time a year ago. Wheat accounts for 63.6 MMT of that total off 99.3% of the planned area. Barley adds another 18.2 MMT, also off 99.3% of plan. Winter grain plantings for the 2016 harvest are said to be 88.5% complete in Russia at 15.1 million ha, down 1 million ha on this time a year ago. Dry weather in Ukraine means that their winter wheat crop is only 81% sown, and less than half of the planned winter barley area has so far been planted. The Ukraine Ag Ministry said that winter wheat plantings could now only total 5.5 million ha versus a previous estimate of 6.2 million. Japan seeks 134,352 MT of food wheat for Nov-Dec shipment in their regular weekly tender. This week that's split between US and Canadian origin, with no Australian material required. Jordan cancelled a tender to buy 100,000 MT of optional origin hard wheat. US Wheat Associates said that in US hard red winter wheat the average protein content is 12.4% which is lower than the 5-year average. The average US hard red spring wheat protein is 14.1% versus 13.6% a year ago, they added. The US winter wheat weather outlook is mixed. "Very heavy rainfall is predicted for the southern Great Plains, the US breadbasket, though soft wheat areas in the Midwest would continue dry. The 5-day forecast calls for drenching rain in the Great Plains, 4-6 times normal in Texas, Oklahoma and Kansas, the 3 leading bread wheat states. Strong showers would develop in Colorado, Nebraska and South Dakota, all significant hard red wheat states. Midwest soft red wheat areas are expected to miss out on the rainfall, perpetuating drought. Very dry Midwest field conditions have developed in the past month, slowing wheat emergence and growth. Rainfall the past 30 days has been negligible," said Martell Crop Projections. Dec 15 CBOT Wheat closed at $4.91 1/4, up 5 1/2 cents; Dec 15 KCBT Wheat closed at $4.76 1/2, up 4 1/4 cents; Dec 15 MGEX Wheat closed at $5.09, up 4 1/2 cents.

20/10/15 -- EU grains closed mixed, but mostly a touch higher. London wheat was under pressure on a firmer outlook for the pound, which hit 1.55 versus the US dollar today, a level it has only been above for a few says since August.

At close, Nov 15 London wheat was down GBP0.50/tonne to GBP112.50/tonne, Dec 15 Paris wheat was up EUR0.50/tonne at EUR175.50/tonne, Nov 15 Paris corn was EUR2.25/tonne firmer at EUR160.75/tonne, whilst Nov 15 Paris rapeseed was EUR1.25/tonne higher at EUR379.25/tonne.

Sterling strength today stemmed from comments by one member of the Bank of England's MPC that called for UK interest rates to rise sooner, rather than later.

Bank of America Merrill Lynch echoed those comments, saying that the market had pushed back expectations for a UK rate rise too far deep into 2016.

They predicted the euro falling to 0.71 against the pound by the end of the year, from around 0.7350 currently. Barclays are even lower at 0.70 for the EUR/GBP. The Merrill Lynch prediction is the equivalent of a GBP/EUR rate of around 1.4080 and the Barclays one equals around 1.4280. Both banks predict further euro weakness once we get into 2016 too, with 0.69 on the cards on Q1 (circa GBP/EUR at 1.45) and 0.68 thereafter (around 1.47).

The ECB meet tomorrow, and few are ruling out the possibility of them increasing QE, if not at this meeting then at some point over the next few months - something that ECB President Mario Draghi has consistently indicated that he is prepared to do. That puts the eurozone at the back of the queue when it comes to possible interest rate rises.

As mentioned many time s before, that would support Paris wheat relative to it's London counterpart going forward, as it would help the competitiveness of euro-priced wheat on the export market.

BoA Merrill Lynch see the EUR/USD exchange rate falling quite sharply from the current 1.14 area to 1.05 by the end of the year, and Barclays' expectations are even lower at 1.03. Both then see parity on the cards by the end of Q1 in 2016. Again this would support the notion that Paris wheat could firm relative to US prices too.

Although EU wheat exports have begun 2015/16 in less impressive fashion than a year ago, these should start to pick up in the second half of the season anyway. There are already signs that Ukraine have "shot their bolt" on wheat and barley, with corn shipments overtaking both in volume last week for the first time this season.

They should now start to major on corn exports, but with an anticipated crop at least 20% lower this year, then the longevity of these will not be the same as it was in 2014/15. That could leave more homes for EU wheat in the second half of the season.

The Ukraine Ag Ministry yesterday forecast total grain production there this season at 59.5 MMT, down 6.7% on a year ago. Corn production was estimated at 22.9 MMT versus 28.5 MMT a year ago.

One Ukraine Ministry official said that winter wheat plantings there are currently only 81% complete, and that only 45% of the planned winter barley area had been sown so far. Today marks the end of the optimum planting window for winter grains, but this may be extended for another 7-10 days, he said. The Ministry said that Ukraine’s winter wheat area for the 2016 harvest could now fall to 5.5 million ha versus a previous estimate of 6.2 million. The USDA has total wheat plantings for 2015 at 7.0 million ha - note that traditionally very little spring wheat is sown in the country.

On top of that winter rapeseed plantings in Ukraine have only been completed on 74% of the government's forecast, and the recommended last planting day for that crop was a month ago.

At home, Defra said that UK wheat yields averaged a record 8.8 MT/ha this year. They now peg production at 16.17 MMT, a 2.6% decline on a year ago due to a 5.3% cut in planted area.

The see average UK barley yields at an also record 6.6 MT/ha, with production of 7.28 MMT representing a 5.3% increase compared with 2014.

UK OSR yields were said to have averaged 3.6 MT/ha, the same as last year, but production has declined 5.6% due to a lower planted area.

19/10/15 -- Soycomplex: Beans closed lower on a combination of harvest pressure and gloomy economic news from China, despite stellar weekly export inspections of 2.365 MMT. News that the Chinese economy grew by 6.9% in Q3 of 2015 was viewed as bearish, even if it did beat forecasts of 6.8%, as it was the first time that growth has fallen below the government's target of 7% since early 2009. China’s September industrial output only rose 5.7% versus the expected 5.9% and compared to 6.1% in August. The impressive weekly export inspections number, which easily beat the expected 1.2-1.8 MMT, means that the season to date total is now nearly 15% larger at the same time a year ago. And that is amidst supposed concern over Chinese demand/sales. In addition, the USDA announced 238,000 MT of US beans sold to China for 2015/16 shipment under the daily reporting system today. The slow start to planting in Brazil's leading state of Mato Grosso appears to be picking up. IMEA said on Friday that Mato Grosso soybean planting is 14.3% complete versus 6.1% a week ago and now ahead of 9.3% a year ago. Rains are in the forecast next week for northern Brazil. The Buenos Aires Grains Exchange forecast Argentina’s 2015/16 soybean area at 19.8 million ha in it's first estimate of the season, down 1% from last year. The Ukraine sunflower harvest is said to be 96% complete at just over 10 MMT, and they've also produced more than 3 MMT of soybeans off 84% of the planned area. After the close the USDA said that this year's US soybean harvest was 77% complete, up from 62% a week ago and versus 68% for the 5-year average. Nov 15 Soybeans closed at $8.91, down 7 1/4 cents; Jan 16 Soybeans closed at $8.95 1/2, down 6 1/2 cents; Dec 15 Soybean Meal closed at $310.80, down $1.20; Dec 15 Soybean Oil closed at 28.14, down 46 points.

Corn: The corn market closed around 3-4 cents lower, it too overshadowed by Chinese woes. Weekly export inspections of 459,812 MT were a bit below the expected 500-700,000 MT too. Last week's inspection were also below expectations, as indeed were those of the week before that as well. Season to date inspections are now 24% behind those of a year ago. Strong competition from South America remains a thorn in the side of US export ambitions. Taiwan were said to have bought three cargoes of South American corn for Feb-April shipment. Mexico, Japan and Egypt are said to be seeking corn. The US should win the Mexican business, but perhaps not the other two. South American corn is said to be offered around $10-12/tonne cheaper than US material on a FOB basis. Dr Cordonnier said that heavy rains in southern Brazil continue to hamper corn export activity. Paranagua missed 10 days of exports in September and has been closed for a further 7 days so far this month due to rain. Waiting times there are now up to 40 days to get vessels loaded, he added. The Buenos Aires Grains Exchange forecast Argentine 2015/16 corn plantings to be down 20% from the previous year at 2.72 million ha, and some private estimates are even lower. China offered 5.4 MMT of state-owned corn stocks up at auction last Thursday and Friday and apparently didn't sell anything at all. Russia said that it's 2015 corn harvest was 59.7% complete at 8.3 MMT off 1.6 million ha. Ukraine said that it's corn harvest was 61% complete at 12.88 MMT. The Ukraine Ag Ministry had cut their forecast for this year's corn crop there to 22.9 MMT, a near 20% slump on 28.5 MMT a year ago due to heat and dryness. The USDA were unchanged on US corn crop conditions at 68% good to excellent versus 74% this time last year. They said that 98% of the crop is mature, up 4 points from a week ago and 2 points ahead of the 5-year average. The 2015 US harvest is 59% complete versus 42% a week ago, 30% done a year ago and 54% for the 5-year average. Dec 15 Corn closed at $3.73, down 3 3/4 cents; Mar 16 Corn closed at $3.83 3/4, down 4 cents.

Wheat: The wheat market closed lower to start the week. Chicago wheat fared the better of the three, although all sustained some fairly significant losses. Poor weekly export inspections of only 205,468 MT set the tone. Expectations were a fairly modest 300-500,000 MT, but even that bar proved to have been set too high. Season to date inspections are down around 20% on a year ago. South Korea's CJ Cheiljedang Corp bought 61,000 MT of US wheat for Feb shipment in a tender for 31,000 MT. South Korea's Daehan bought 50,000 MT of Australian wheat for April shipment and the country's KFMC bought 61,300 MT of Australian and US wheat for Feb-March shipment. Russia said that it had harvested 63.6 MMT of wheat so far this season off 99.1% of the planned area. Russian customs data says that they exported 894.6 TMT of grains last week, including 496.8 TMT of wheat and 134.1 TMT of barley. Season to date exports are said to be 13.57 TMT, including 10.02 MMT of wheat. Calendar year exports are 26.2 MMT, of which 60% (15.7 MMT) is wheat. A chief commodity analyst at ABARES estimated Australia’s 2015/16 wheat crop at 24.0 MMT versus the previous official ABARES estimate of 25.28 MMT and the USDA's current estimate of 27.0 MMT. Jordan are tendering for 100,000 MT of hard wheat and 100,000 MT of barley, both of optional origin. The USDA said after the close that US 2015/16 winter wheat plantings had caught up, with 76% of the crop on the ground versus 64% a week ago, 75% a year ago and 77% for the 5-year average. They put the crop at 49% emerged, exactly in line with the 5-year average. They were expected to release their first crop condition ratings of the season but didn't. India announced a sharp upward revision to its wheat import tax, up from 10% to 25%. The increased duty will be in effect until March 31, 2016. Ukraine's winter grain crop is said to be 78% planted, and Russia's is 88% done. Much needed rains are in forecast for central Ukraine and southern Russia in the next 10 days. Dec 15 CBOT Wheat closed at $4.85 3/4, down 6 1/2 cents; Dec 15 KCBT Wheat closed at $4.72 1/4, down 11 1/4 cents; Dec 15 MGEX Wheat closed at $5.04 1/2, down 7 3/4 cents.

19/10/15 -- EU grains closed mostly lower, with more gloomy economic news from China setting a negative tone from the outset. The pound was up against both the dollar and euro on the perception that the UK is better insulated against a Chinese slump than the US or eurozone are.

At the close, Nov 15 London wheat was down GBP1.25/tonne at GBP113.00/tonne. In Paris, Dec 15 wheat was EUR1.25/tonne easier at EUR175.00/tonne, Nov 15 corn was down EUR2.75/tonne to EUR158.50/tonne. Just rapeseed managed a higher close, with Nov 15 up EUR1.00/tonne to EUR378.00/tonne.

This was the first time that a front month on Paris corn has closed below EUR160/tonne since the first few days of June, and this comes despite sharply lower production forecasts here in Europe and in near neighbour and large exporter Ukraine.

News that the Chinese economy "only" grew by 6.9% in the third quarter was seen as bearish, even if some expectations were for growth of 6.8%. This was in fact the first quarter to see growth of less than the official target of 7% since the start of the global economic crisis.

That seemed to overshadow everything else today, including news that the Ukraine Ag Ministry had cut their forecast for this year's corn crop there to 22.9 MMT, a near 20% slump on a year ago due to heat and dryness.

The ongoing Ukraine corn harvest is now said to be 61% complete at 12.88 MMT. The bare bones of that data suggests that even hitting 22.9 MMT could still be a tall order as it implies a final crop of only 21.1 MMT unless yields pick up from here on in.

The Ukraine sunflower harvest is 96% complete at just over 10 MMT, and they've also produced more than 3 MMT of soybeans off 84% of the planned area.

Winter grain plantings, almost exclusively wheat, are said to be 78% complete on almost 5.75 million ha. Wheat plantings of just over 5 million ha are at 78% of the government's expectations, and barley sowings of 525k ha are just 50% of what the Ukraine Ag Ministry originally forecast.

In Russia, the 2015 harvest is said to be 96.5% complete at 103.1 MMT. That includes 63.6 MMT of wheat (off 99.1% of the intended area), 18.1 MMT of barley (99.2%) and 8.3 MMT of corn (59.7%).

Russian winter grains are said to be planted on an area of 15.1 million ha (88.1% of the Ministry forecast), which is 800,000k less than this time last year.

Kazakhstan's harvest is said to be 99.8% complete at 19.6 MMT versus only 15.78 MMT this time a year ago.

APK Inform said that Ukraine seaports exported 550.3 TMT of grains last week, down from 896.2 TMT the previous week. Corn exports are now starting to pick up, as they accounted for 258.9 TMT of last week's total, that's the first time that they have beaten wheat this season. Wheat exports were 225.4 TMT and barley shipments were 66 TMT.

Russia's Ag Ministry said that it's grain exports Jul 1 to Oct 14 were 11.75 MMT, a 16.2% decline on a year ago. Wheat accounted for 9.12 MMT of that total, barley 1.94 MMT and corn 617 TMT.

19/10/15 -- As mentioned in Friday's EU grains report Nov 15 London wheat was trading at a slightly more than GBP15/tonne premium to the front month Nov 14 a year ago, and the differential between the near Nov 15 and long Nov 16 positions are almost exactly the same today.

Twelve months ago, and much the same today I guess, few probably fancied the idea of selling the long Nov position, fifteen quid premium or not. GBP130/tonne is below the cost of production most would say, so what's the point of locking in a loss at this early stage of the game?

Well, one point would be that IF the next 12 months turns out to be a carbon copy of the last twelve, then in a year's time prices will be fifteen quid less than what's on offer today, so your "hold off" strategy might just end up costing you more money.

What you are guilty of here is ignoring several of the golden rules of trading:

a) Letting your emotions get the better of you. "It's got to go up, we can't carry on producing wheat at a loss." Maybe that's true in the long run, but have you (or any of your neighbours) significantly scaled back (or plan to) your wheat plantings for 2016? No. Strategie Grains forecast EU wheat plantings down just 0.4% for next year's harvest.

b) Running with the herd. "Everybody" around me (ie every other cereal grower you know who is in exactly the same boat as you) says that the price has to go up. They're saying it because they want to believe it. They wanted to believe it 12 months ago too, that's why very few took the GBP15/tonne long Nov premium then.

c) Recency bias. "Wheat has spent much of 4 of the last 5 years in the GBP150-200/tonne range, therefore it HAS to go back to that sort of level." It spent most of the previous 25 years in the GBP70-90 region.

d) Money imbalance. Viewing money already spent or lost
as more important than money that
could be spent or lost in the future. "Well, I've lost X thousands already, what difference is another 15 grand (or whatever) going to make?" It's 15 grand - if it's that unimportant to you send it to me!

All these rules apply equally when the market is in an inverse.

Back in Nov 2012 you could have forward sold Nov 14 London wheat at GBP175/tonne, but very few did. Why? Well spot stuff was making GBP220/tonne back then, so GBP175/tonne (even though it guaranteed a healthy profit unless yields were an unheard of disaster) was viewed as locking in a loss. Money imbalance. Tick.

Your emotions got the better of you back then. Tick. "Everybody" said that finally wheat was going to be GBP200/tonne forever, yipee! Tick. What had happened in the last year or two was far more important and relevant than everything that had gone before in your entire lifetime. Tick.

Footnote: Yes, I do still believe that we will see wheat at GBP200/tonne again one day in the not too distant future (just probably not in 2016). I took plenty of stick in the trade for saying that the other week - just as I took plenty of stick for forecasting prices to drop back to the GBP100/tonne level when they were over GBP200/tonne.

Look at where the price of spot wheat is now, and look at the Nov 16 price. If you sell Nov 16 and it ultimately proves to be the worst sale on your books will you be happy? I would be if I was you. Tick. It would also mean that all the unsold 2015 crop that you have sitting in the barn should move up in price too. Tick. If the market repeats the last 12 months in the next 12 then you'll at least have some wheat sold at 15 quid over the market next year. Tick.

About Me

Worked in agriculture for over 30 years as a shipper, merchant, trader & broker, but still hasn't got the faintest idea what he's talking about.
Likes beer apparently, so why not do the decent thing an hit the donate button you tight bastard?
He can also provide content for your website like market reports and commodity prices. And if you haven't got a website he can design one for you. In short, the man's a bloody genius.

Disclaimer

All comments on this website are the sole opinion of the author, and are not capable of nor intended to constitute professional advice. Neither can Nogger give any guarantee for the accuracy of any of the information or data contained within this site.

The guy is clearly deranged and you should almost certainly ignore everything that he says.